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Cemex S.A.B. De C.V (CX) In A Perilous Reversal

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified
Cemex S.A.B. de C.V (
CX) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Cemex S.A.B. de C.V as such a stock due to the following factors:

CX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $246.0 million.

CEMEX, S.A.B. de C.V., through its subsidiaries, produces, markets, distributes, and sells cement, ready-mix concrete, aggregates, and other construction materials in Mexico, the United States, Northern Europe, the Mediterranean, South America, Central America, the Caribbean, and Asia. Currently there are 7 analysts that rate Cemex S.A.B. de C.V a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Cemex S.A.B. de C.V has been 15.6 million shares per day over the past 30 days. Cemex S.A.B. de C.V has a market cap of $14.1 billion and is part of the industrial goods sector and materials & construction industry. Shares are up 14.8% year-to-date as of the close of trading on Friday.

TheStreet Quant Ratings rates Cemex S.A.B. de C.V as a
hold. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income and revenue growth. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.

Highlights from the ratings report include:

CEMEX SAB DE CV has improved earnings per share by 46.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, CEMEX SAB DE CV continued to lose money by earning -$0.69 versus -$0.79 in the prior year. This year, the market expects an improvement in earnings (-$0.05 versus -$0.69).

The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Construction Materials industry. The net income increased by 47.0% when compared to the same quarter one year prior, rising from -$485.47 million to -$257.16 million.

Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.

The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Construction Materials industry and the overall market, CEMEX SAB DE CV's return on equity significantly trails that of both the industry average and the S&P 500.

The gross profit margin for CEMEX SAB DE CV is currently lower than what is desirable, coming in at 32.16%. Regardless of CX's low profit margin, it has managed to increase from the same period last year.